UMW (HOLD çè)
UMWOG P/E Lowered
- In view of lower midterm oil price at US$80-90/bbl (from >US$100/bbl), negative sentiment and lack of sizeable contract newsflow for upstream sector, our O&G analyst believe that O&G sector no longer command premium valuation (Refer to O&G sector report dated 20 Oct 2014).
- HLIB has cut the targeted P/E valuation for UMWOG to 16x (from 20x) with lower target price of RM3.29 (from RM4.12).
- Following our O&G analyst cut in UMWOG target price, we cut our target price of UMW to RM11.43 (from RM12.28) based on SOP.
MAHB (BUY çè)
ISGA- Turkey bright future ahead
- MAHB remained confident on ISGA potential earnings growth and reiterated that the IRR of the latest acquisition (@ EU€ 285m) is above its 15% threshold.
- MAHB believes that they able to work well with Turkey government even without Limak Group and TAV since Turkey practices an open policy on foreign investment.
- Potential revision of current PSC (EU€15/int’l departure) due to Turkey new airport tariff is fixed at EU€20//int’l departure.
- MAHB is not ruling out debt raising exercise. However, we do not expect MAHB to upset the existing bondholders (due to potential downgrading of bond rating) and anticipate MAHB to raise funds through equity exercises.
- Despite the short-term weaknesses in earnings and EPS, we remain positive on MAHB’s long term growth. Maintained BUY with unchanged TP of RM8.90 (based on SOP).
Traders Brief
To retest our 1825-1834 relief rally targets this week
- Technically, on the back of ongoing Dow’s rebound, expectations of dovish remarks by Fed on 28-29 Oct FOMC meeting and slightly improved external newsflows, we remain optimistic that KLCI is likely to retest our short term resistance near 1825-1834 levels this week. However, the path will not be smooth as sentiment could be consistently affected by external headlines. Weekly upside targets are 1825-1834 whilst supports fall on 1800 levels.
- Closed positions: We had closed our positions on ARMADA and KNM after hitting our upside targets on 24 Oct. Today’s recommendation: Impulse BUY on GPACKET.
Impulse Trading - GPACKET
GPACKET: Positive Divergence signals upside
- Share price (low of RM0.31 on 21 Oct 2014 compared to low of RM0.305 on 2 Sep 2014) and oscillators (daily RSI, MACD and Slow Stochastics) are making higher low, triggering strong upside trajectory.
- Noticeably, “Positive Divergence” formation on hourly chart indicates strong buying momentum. Moreover, weekly chart also shows potential upside as indicated by Doji candlestick. Upside targets are at RM0.35, RM0.36 and RM0.38. We see good supports at RM0.325 and RM0.315. Cut loss at RM0.305.
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